New DOL Regulations on Paid Leave under the Families First Coronavirus Response Act: Top Five Takeaways for Employers

04.06.2020

Since the Families First Coronavirus Response Act (“FFCRA”) was signed into law on March 18, 2020, the Department of Labor has issued a flurry of guidance to help employers implement the emergency sick leave and emergency family and medical leave requirements of the new law. In a previous post, we explained essential aspects of the DOL guidance for employers attempting to navigate the FFCRA leave requirements. 

Subsequently, on April 1, 2020, the effective date for the leave provisions under the FFCRA, the DOL published its Temporary Rule, setting forth regulations governing emergency sick leave and emergency family and medical leave under the FFCRA. The regulations, which are effective from April 1 to December 31, 2020, contain two dozen new rules, as well as additional commentary from the DOL—all totaling more than 120 pages. Fortunately, the new regulations are—by and large—consistent with the DOL’s previous guidance. There are, however, several noteworthy aspects of the new rules. Below are our top five takeaways for private employers. For specific applications of these new rules to your workforce, when in doubt, consult experienced employment law counsel.

1. “Stay at Home” orders can be “quarantine or isolation orders” that trigger emergency paid sick leave rights.

Under the FFCRA, one of the qualifying events for emergency paid sick leave is when an employee is unable to work (even by telework) because the employee is subject to a federal, state or local quarantine or isolation order related to COVID-19. According to the regulations, a “quarantine or isolation” order includes shelter-in-place and stay-at-home orders. While the inclusion of such orders—which apply broadly to residents in the subject locations—has the potential to significantly expand the reach of this qualification for paid leave, in practice it is not likely to do so. This is because the DOL regulations also make clear that an employee will qualify under this category only if “but for” the order the employee would have been able to perform work, either on-site or through telework.  Furthermore, the DOL regulation explains that an employee may not take emergency sick leave if the employer does not have work for the employee as a result of the government order or other circumstances. 

With these clarifications, the scenarios under which an employee is unable to work “but for” a shelter-in-place or stay-at-home order are likely limited—e.g., an employee who lives in one jurisdiction and works in another, cannot telework, and is restricted from traveling to the jurisdiction of his workplace where his employer remains open for business. In evaluating leave requests based on shelter-in-place or stay-at-home orders, it will therefore be important to analyze the specific terms of the order applicable to the employer and employee to determine eligibility under the particular circumstances presented.

2. The DOL interprets “child care provider” broadly, but also imposes limits.

The FFCRA provides that caring for a son or daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 precautions is a basis for both emergency sick leave and emergency family and medical leave. Given the vast scope of school and day-care closures in the wake of COVID-19, requests for leave under this category are likely to be among the most frequently received by employers. The DOL’s regulations provide useful guidance for employers on applying this aspect of leave. 

The DOL defines “child care provider” as a “provider who receives compensation for providing child care services on a regular basis,” and includes center-based child care providers, group home child care providers, family child care providers, and other providers of child care services that are licensed, regulated, or registered under state law. But, the DOL makes an exception to the compensation requirement for friends and family—noting that an eligible child care provider “need not be compensated or licensed if he or she is a family member or friend, such as a neighbor, who regularly cares for the Employee’s child.” 

The DOL does, however, also recognize a limit on the right to leave for the care of a child whose school is closed or care provider is unavailable due to COVID-19. The regulations state that an employee is only entitled to leave under this category if there is “no other suitable person” available to care for the child during the leave period requested. Thus, if a spouse or other friend or family member is able to care for the child during that time, the employee would not be eligible for leave. 

3. Telework gets further explanation from the DOL.

An important aspect of leave entitlement under the FFCRA is that an employee must be unable to work—even by telework—for the allowed reasons. During the COVID-19 pandemic, telework has become increasingly important to many workers and businesses to maintain operations.  If a company allows an employee to telework, then the employee’s time spent teleworking is work time, for which the employee must be paid, and not leave time. The DOL regulations provide that telework can be performed during normal business hours, but also “at other times agreed” by the company and the employee. Thus, if a teleworking schedule can be agreed upon with an employee that allows for telework to be done at times that permit a normal workday to be completed, even during non-traditional business hours, leave may not be necessary. 

The DOL explains that the regulations are meant to encourage companies and their employees to “implement highly flexible telework arrangements” that allow employees to do their work from home while also tending to family and other responsibilities. To that end, the DOL clarifies that the “continuous workday” rule—which provides generally that all time between an employee’s performance of his or her first and last principal activities in a given day is compensable work time—does not apply to employees while they are teleworking for COVID-19 related reasons.

4. The “fewer than 500” threshold can be a moving target.

The DOL regulations clarify that, in determining whether a private employer has fewer than 500 employees for purposes of coverage under the FFCRA, the employee headcount must be made “at the time the Employee would take leave.” The DOL further explains that companies should not include workers who have been laid off or furloughed and have not subsequently been reemployed. Thus, a company that has 525 employees on April 1, 2020 would not be covered as to leave requests made on that date, but if the company furloughs 30 workers on May 1, 2020, the company would then be a covered employer that must grant leave for eligible employees as of that later date. Companies that are close to the threshold should therefore establish an accurate method of tracking employee headcount through the end of 2020 so that they can properly address any changes to their coverage status.

5. Employees must provide basic information supporting their leave requests, but Employer record-keeping is critical.

A source of concern for many companies attempting to implement the FFCRA has been the level of information and documentation needed to establish employee entitlement to leave. While the full scope of what type of documentation can be requested or required remains unclear—which favors continued flexibility on the part of employers in applying policies regarding leave documentation—the DOL regulations do provide useful guidance on what information an employee must provide. According to the DOL, an employee seeking leave must provide the following information:

• Employee’s name;
• Date(s) for which leave is requested;
• Qualifying reason for leave; and
• Oral or written statement that the employee is unable to work because of the qualified reason for leave.

 Furthermore, as to specific categories of leave, the DOL explains that:

• An employee requesting leave on the basis of a quarantine or isolation order must provide the name of the government entity that issued the order.
• An employee requesting leave because of a self-quarantine instruction from a health care provider must provide the name of the provider who advised the employee to self-quarantine.
• An employee seeking leave to care for an individual under quarantine order or self-quarantine directive must provide, as applicable, the name of the government entity that issued the order or the name of the provider who advised the individual under the employee’s care to self-quarantine.
• An employee seeking leave to care for a child whose school is closed or child care provider unavailable must provide: (1) the name of the child being cared for; (2) the name of school or place of care that is closed or unavailable; and (3) a representation that no other suitable person will be caring for the child during the period of leave requested.

The employer can also request that an employee provide any additional materials needed for the company to support a request for tax credits under the FFCRA.

The DOL regulations further provide that intermittent leave agreements under the FFCRA can be memorialized in writing, but “a clear mutual understanding between the parties is sufficient.”

In addition, the DOL regulations state that companies must keep documentation related to FFCRA leave requests for four years. Importantly, if an employee provides oral statements to support a leave request, the regulations put the burden on the company to “document and maintain such information in its records.” 

The DOL regulations also confirm that the documentation required to establish the “small business exemption” from certain aspects of the leave requirements for companies with fewer than 50 employees should not be sent to the DOL, but rather retained in the company’s records. 

It is therefore crucial for companies to make sure that personnel who are managing leave requests keep good records and document any oral communications in writing. Also, if the company takes the position that it is exempt from granting certain leave under the small business exemption, it must also maintain sufficient documentation to support that position if challenged later. 

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The Hirschler Recovery Team: It may soon be a rare business enterprise that is able to insulate itself from the negative economic effects of the COVID-19 pandemic. While we hope the economy will rebound once the pandemic begins to abate, until then, the Hirschler Restructuring and Creditors Rights Group stands ready to assist clients in addressing the financial challenges of these economically unsettled times. Whether you are facing the loss or interruption of business, challenging financing relationships, the need to downsize or restructure, or other creditors’ rights issues, the Hirschler team will work with you toward a successful outcome. Contact us to understand your options and devise a recovery strategy that protects your business and financial health.